Results of Lietuvos Energijos Gamyba for January-March 2019: stable profitability indicators and preparation for important projects

Lietuvos Energija Gamyba, which is a part of Lietuvos Energija Group, maintained stable profitability indicators in the first quarter of 2019 and was actively preparing for the projects important for the whole energy system.In January-March 2019, the results of Lietuvos Energijos Gamyba were significantly affected by dry spring and electricity prices formed in the market. There was little snow and rain in the beginning of the year, so no major flood was caused and Kaunas A....

Lietuvos Energija Gamyba, which is a part of Lietuvos Energija Group, maintained stable profitability indicators in the first quarter of 2019 and was actively preparing for the projects important for the whole energy system.

In January-March 2019, the results of Lietuvos Energijos Gamyba were significantly affected by dry spring and electricity prices formed in the market. There was little snow and rain in the beginning of the year, so no major flood was caused and Kaunas A. Brazauskas' Hydroelectric Power Plant generated 21% less electricity in January-March 2019 than in January-March 2018. The difference in prices of day and night electricity rates on the exchange in January-March 2019 was smaller, if compared to previous years. So, in January-March 2019 the amount of electricity generated in Kruonis Pumped Storage Hydroelectric Plant was 45% smaller.

In total, 31% less electricity was generated and sold by power plants controlled by the Company in January-March 2019, if compared to the same period in 2018. Although the Company's income was decreasing, its profitability indexes remained relatively stable, if onetime factors are dismissed.

Adjusted EBITDA reached EUR 14.5 million in January-March 2019 and remained stable if compared to the same period in 2018 (EUR 14.7 million). The influence of smaller production volumes in Kruonis PSHP and Kaunas A. Brazauskas HPP was compensated by positive sale results of fuel oil reserves and bigger volumes of regulated services in Elektrėnai Complex. Adjusted EBITDA margin of the Company reached 42.4% in January-March 2019 (January-March 2018: 44.3%).

“We take care of the power plants to generate as much as possible of electricity and guarantee return to the shareholders. At the same time we are concentrating on preparing for the most important works for the entire energy system. We want to be well prepared to play our role in the project of synchronization with networks of continental Europe. The tests of the conserved units 7 and 8 carried out in March 2019 were successful. The units will be prepared for work and will take an important role in the tests of isolated network together with other power plants of the Company”, Rimgaudas Kalvaitis, the Chairman of the Board and CEO of Lietuvos Energija Gamyba commented the main accents of the Company's performance.

According to him, the Company made a significant progress in clearing-up projects in Elektrėnai Complex, also in the implementation of new projects. Units 5 and 6 are being dismantled, the fuel oil was removed from Elektrenai Complex in the first months of 2019, and the preparatory works and procurement procedures for disassembling of unused chimneys are carried out, also for the implementation of innovation projects of experimental floating power plant in Kruonis PSHP and energy storage system in Kaunas A. Brazauskas HPP.

Key indicators of Lietuvos Energija Gamyba for January-March 2019:

• The Company's sales revenue totalled EUR 28.9 million in January-March 2019 and decreased by 11.5% compared to January-March 2018 (EUR 32.6 million). Such decrease was mostly caused by decrease in electricity production volumes at Kaunas A. Brazauskas HPP and Kruonis PSHP.
• In January-March 2019, the Company incurred EUR 5.3 million in operational expenses. In January-March 2018, operational expenses reached EUR 4.2 million (20.8% less). Dismantling projects implemented in Elektrėnai Complex acted as the main reason for the increase of operational expenses. 
• Adjusted EBITDA* reached EUR 14.5 million in January-March 2019 and remained stable if compared to the same period in 2018 (EUR 14.7 million).
• Net profit of the Company in January-March 2019 was almost EUR 17.0 million, or 21.4% higher than the net profit in the January-March 2018 (EUR 14.0 million).
• In January-March 2019, the Company invested EUR 0.1 million in non-current tangible and intangible assets, while this investment in January-March 2018 was EUR 2.5 million. Most of the sum in January-March 2018 was intended for the major repairs of the second hydro unit of Kruonis PSHP.

* The EBITDA results of the Company are presented after the adjustments made by the management, eliminating the impact of one-time factors. The purpose of these adjustments is to disclose the results of the Company's ordinary activities, without atypical, one-time factors directly unrelated to the current operating period. All management's adjustments are disclosed in interim and annual reports of the Company.

Additional information:
Valentas Neviera
Head of Sustainability Communication
[email protected], +370 670 25997

Attachments

• LEG 2019 3 months Company's condensed interim financial information
• LEG interim report for January-March 2019